When bankers earning $700k blow their money and lose their jobs
Matt Connolly has experienced the good side of working on a trading floor in an investment bank. And he has experienced the very bad side.
Connolly spent nearly two decades as a trader on Wall Street, rising to become a senior trader on Deutsche Bank's derivatives trading desk in New York. Connolly says he made good money, but it ended badly.
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In 2016, Connolly lost his job at Deutsche Bank and was accused of manipulating the LIBOR rate. In 2019, he was convicted and sentenced to home confinement. Four years later, though, he was acquitted. Connolly sued Deutsche Bank for $150m, which settled out of court in 2024. He's written a book about his experiences and is a man of leisure with an active account on X.
Writing there a few weeks ago, Connolly said there was a time in 2005 when he paid a guy $400k for two years in a row (nearly $700k at today's prices) and gave him two years' notice that his job was disappearing. However, when the trader's job did, subsequently, disappear, Connolly said the trader complained that he was "broke/desperate." - "His Porsche was a year old. Dude WTF are you thinking?," Connolly added.
Elaborating on this post, Connolly says there's always a portion of people in banking who overspend. "Just like professional sports, a certain portion of bankers take one good year of pay, project that out 30 years, and start spending that way. Not realizing it rarely works that way."
With mortgage costs rising, high end London house prices falling and banking jobs at risk of automation, Connolly's cautionary tale has new relevance. There's limited sympathy for people who work in financial services, he tells us, but most are just normal people. Most don't earn $700k and don't buy new Porsches but are nonetheless subject to the vagaries of the brutal employment cycle. "Accountants, back office people, IT staff, just regular people making a living." No one, though, should spend as if their jobs are secure. Financial services is a notoriously erratic industry.
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Just like professional sports i'd imagine, a certain portion of bankers take one good year of pay and project that out 30 years, and start spending that way. Not realizing it rarely works that way. I would guess that hold true of all generations since WWII.
